Shiv Iyer, Partner | Ankita Sen, Senior Associate | Anitta Varghese, Junior Associate
The Bombay High Court passed a rather interesting judgment in the matter of Angsley Investments Limited v Jupiter Denizcilik Tasimacilik Mumessillik San. Ve Ticaret Limited Sirketi [1], while dealing with restraint of a vessel (purportedly a sister vessel) by an order of injunction, instead of a conventional order of arrest.
Brief Facts:
Jupiter Denizcilik Tasimacilik Mumessillik San. Ve Ticaret Limited Sirketi (“Jupiter”), a Turkish company, filed an Admiralty Suit before the Bombay HC and sought arrest of MV Lima II, for a claim of unpaid bunkers supplied to the vessel. Jupiter added owners of MV Lima II, Lima Denizcilik Ve Tic Ltd. Sreketi (“Lima Denizcilik”) as a party Defendant to the Suit. The Bombay HC passed an order of arrest against MV Lima II while the vessel was at Kandla. However, the vessel jumped arrest and escaped from Kandla Port.
Jupiter thereafter, moved an application to restrain MV Lima I (allegedly a sister vessel of MV Lima II) from leaving the Port of Calcutta, where she was at the relevant time. Pursuant to the same, an ad-interim order of injunction was passed by the Bombay HC restraining MV Lima I from sailing out of the Port of Calcutta. This order was later confirmed by an order passed by the Bombay High Court. None entered appearance on behalf of Lima Denizcilik.
Subsequently, Angsley Investments Limited (“Angsley”) furnished security for release of MV Lima I. Angsley was thereafter permitted to join as a party Defendant to the Suit. It claimed that it had purchased MV Lima I from Mercury and had in turn sold her to Jain Udyog. Angsley thus claimed that MV Lima I and MV Lima II were not sister vessels since the MV Lima I was not owned by Lima Denizcilik at the time when the Suit was filed and when the order of injunction was passed by the Bombay HC. However, the Ld. Single Judge of the Bombay HC decreed the Suit in favour of Jupiter.
Aggrieved by the order passed by the Ld. Single Judge, Angsley filed an appeal challenging the same. The Appeal Court heard submissions made by Angsley and the Amicus Curiae appointed in the matter. The Court, inter alia, considered the following issues:
(i) Whether Jupiter proves that the suit is tenable against Lima Denizcilik?
(ii) Whether the suit is tenable against MV Lima I without adding the said vessel to the Suit and without obtaining an arrest order of the said vessel?
Broad Submissions on behalf of Angsley:
1. MV Lima I was restrained by an order of injunction and no claim in rem was sought against the said vessel. Therefore, the Ld. Single Judge could not have exercised admiralty jurisdiction to entertain the suit.
2. Jupiter had not impleaded MV Lima I as a party defendant. Therefore, there is no maritime claim against the said vessel to invoke the admiralty jurisdiction.
3. Lima Denizcilik, being a Turkish company, is not within the territorial jurisdiction of the Court, therefore, the Ld. Single Judge could not have exercised jurisdiction.
Broad Submissions made by the Amicus Curie:
1. An action in personam against Lima Denizcilik which is not within the jurisdiction of the Court is not maintainable. Lima Denizcilik has neither entered appearance nor furnished security or submitted to the jurisdiction of the Court, hence, the action in rem is not converted into action in personam.
2. A party cannot be added to the interim application without being a party to the suit. In the present case, MV Lima I was not made party to the suit.
3. As per section 5(2) of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 (“Admiralty Act 2017”), to obtain arrest of a sister-ship, the tests of section 5(1) will have to be satisfied. This would include making the sister-ship a party to the suit.
4. The suit filed by Jupiter continued to be an action in rem against MV Lima II. Jupiter could not have obtained an injunction against MV Lima I because, injunction being an in personam action is not available against a vessel.
Decision and findings rendered by the Appeal Court:
The Court held that the Suit is not maintainable against Lima Denizcilik on the following grounds:-
1. The Court held that an action in personam qua a foreign defendant, i.e. Lima Denizcilik who is not within the jurisdiction of the Court and who has not voluntarily submitted himself to the jurisdiction, is not maintainable;
2. An action in rem gets converted into an action in personam if the vessel owner enters appearance, furnishes security, and submits to the jurisdiction of this Court. Until then, the suit continues to be an action in rem against the vessel. Here, Lima Denizcilik has not entered appearance, leave alone furnishing security and submitting to the Court’s jurisdiction. Therefore, the Suit has not converted to an action in personam against Lima Denizcilik.
The Court held that MV Lima I could not have been restrained on the following grounds:
3. A party cannot be added simply as a party to an interlocutory proceeding, without being a party to the suit. Also, as per the Admiralty Act 2017, to proceed against a sister vessel, the said vessel has to be made a party to the suit. In the present case, only an order of injunction (and not arrest order) was passed against MV Lima I.
4. An injunction or even an attachment cannot be made against a vessel since the same are actions in the realm of in personam proceedings. Only an action in rem can be maintained against a vessel. A hybrid action conjoining an action in rem and an action in personam is disapproved that Jupiter has sought to move in the present case, is disapproved of.
5. A Court assumes jurisdiction over a vessel not by an order of injunction but by an order of arrest. Also, the jurisdiction assumed is over the specific vessel and not on the ‘subject matter’ of the Suit. Merely because the Court had ordered arrest of MV Lima II does not mean that it could have passed an injunction against MV Lima I.
In the light of the aforesaid findings, the Court held that whether or not MV Lima I and MV Lima II are sister vessels is of little or no relevance. The Court thus, allowed the appeal and directed that the security furnished by Angsley be returned.
[1] Appeal No. 902 OF 2006 in Admiralty Suit No.15 of 2001, Order dated 8th March 2023.